facility that guarantees merchants their money.

Faced with an average rate of having four percent of cheques returned, firms are opting for a guarantee service provided by Bermuda Financial Network Limited (BFN) that even clears US cheques.

BFN president Dalzell Tucker said that since April, one company a day has been signed up for the service that pre-clears cheques in about six seconds.

The company also hopes to soon begin marketing the service overseas directly to potential visitors, as no such service exists in the Caribbean.

Mr. Tucker said: "It removes the accounting and chasing up of returned items.

Without the service, there is a cost involved for firms in booking the item from sales to accounts receivable.'' The service includes automated equipment installed at the participating firms that read the account numbers on the MICR (Magnetic Ink Character Recognition) line.

BFN vice president Alvin Wilson said: "This system is probably two to three times faster than that used in Bermuda before (Telecheck), from what I've been told.'' Mr. Tucker said the company uses the Bank of Butterfield's Electronic Data Interchange system (EDI) to access its database which then checks the creditworthiness of the chequing account holder.

The service is funded by a the merchant paying a "small fee''. The company also intends to earn revenues by collecting on those cheques which it has guaranteed to the merchant which are returned.

Mr. Wilson said the company hoped to sign up some of the Island's biggest businesses shortly.

"We've also have been talking to major hotels, who are interested. We also hope to resume some discussions with the Government,'' he said. "Right now, the Bermuda Hospitals Board is participating in the service.''